By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – The New York Attorney General blasts the SEC. The SEC blasts the New York Stock Exchange. And it's all because the protectors of the investors were not doing their job. I'm Maxine Shapiro with KERA Marketplace Midday.
Eliot Spitzer rode into Washington today to speak before a senate subcommittee on financial management. Tomorrow, he makes the rounds to the House Financial Services Committee. It all has to do with the mishandling of investor money in mutual funds - one of the most trusted vehicles in investments. Spitzer has been a no-nonsense crusader for the millions of Americans who have just become another number and dollar sign to the banking industry.
He started his probe into improper fund trading this summer. Canary Capital has already paid a $40 million fine, while other investment banks have been named in the deepening inquiry. And then today, two chief executives bite the dust. Lawrence Lasser of Putnam Investments and Richard Strong of Strong Mutual Funds both resigned under the pressure and revelations made by this New York Attorney General.
And Eliot wants to know, among other things, what took the Securities and Exchange Commission so long to start their own investigation? When your "primary mission," as quoted from their website, "is to protect investors and maintain the integrity of the securities markets," his question is more than rhetorical, although I don't think we'll ever get an answer.
So now the SEC, in a not-so confidential report, is reaming the New York Stock Exchange for looking the other way while the elite floor-trading firms were shortchanging investors to the tune of $155 million - just over the last three years. The Wall Street Journal uses terms like "failing to police" and "ignoring blatant violations," as it reveals what in the 40-page report.
Between the zealous fees charged in the mutual funds scandal and the improper floor trading on the big board, it's a wonder more investors aren't finding their mattress the safest home for their money. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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